Centre signs share purchase agreement with Tata Sons for ₹18,000-cr Air India deal
Premium- The deal also includes the sale of Air India Express and ground handling arm AISATS
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The Centre today signed a share purchase agreement with Tata Sons for sale of debt-ridden national carrier Air India for ₹18,000 crore.
"Share Purchase Agreement signed today by Government with Tata Sons for strategic disinvestment of Air India," Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey wrote on Twitter.
The deal also includes the sale of Air India Express and ground handling arm AISATS.
Meanwhile, Civil Aviation Secretary Rajiv Bansal had earlier said that the disinvestment of Air India will lead to further growth of the national carrier in a professional manner, including better utilisation of its wide-body planes and upgradation of in-flight services.
Bansal also noted that with better utilisation, the number of flying hours for an aircraft will increase.
Regarding a new airline that is likely to start operations in the coming months and an expected revival of Jet Airways, the civil aviation secretary said that having more players will be good for the health of the sector and will benefit consumers.
"We will be happy with more players as it reduces market domination and monopoly as well as leads to competition that ultimately benefits consumers," Bansal told PTI during a brief interaction.
Earlier this month, the Central Government had accepted an offer by Talace Pvt Ltd, a unit of the holding company of the salt-to-software conglomerate, to pay ₹2,700 crore cash and take over ₹15,300 crore of the airline's debt.
Following that, on October 11 a Letter of Intent (LoI) was issued to the Tata Group confirming the government's willingness to sell its 100 per cent stake in the airline.
Tatas beat the ₹15,100-crore offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of ₹12,906 crore set by the government for the sale of its 100 per cent stake in the loss-making carrier.
While this will be the first privatisation since 2003-04, Air India will be the third airline brand in the Tatas' stable -- it holds a majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.
The loss-making Air India has 43 wide-body planes, including 27 Boeing 787s.
With agency inputs
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